2025-03-25 22:48

OBR halves 2025 growth forecast Watchdog raises public borrowing estimates Reeves tries to link downgrade to global uncertainty Fiscal headroom restored as Reeves cuts spending growth plans Government borrowing costs fall after budget update LONDON, March 26 (Reuters) - British finance minister Rachel Reeves, facing a weak economy, trimmed her spending plans in a budget update on Wednesday that gave some reassurance to investors, but the risks of a global trade war could put tax hikes back on the table later this year. Britain's budget watchdog halved its forecast for economic growth in 2025 and said a catch-up towards the end of the decade would not make up all of the difference. It also raised its forecasts for public borrowing and inflation. Sign up here. Reeves sought to pin the downgrade on "a changing world," citing the war in Ukraine and uncertainty overhanging the world economy which is at risk of upheaval from U.S. President Donald Trump's trade tariff plans. "The global economy has become more uncertain, bringing insecurity at home as trading patterns become more unstable and borrowing costs rise for many major economies," she said. However, the budget watchdog said an increase in employers taxes announced by Reeves in her first full budget last October would weigh on growth in earnings for workers from next year, representing another brake on the economy. Reeves said she would not let the slowdown jeopardise her budget plans and she acted to rebuild a nearly 10 billion-pound ($12.90 billion) fiscal buffer that had been more than wiped out in just five months by the weaker economic outlook and higher borrowing costs. "These fiscal rules are non-negotiable. They are the embodiment of this government's unwavering commitment to bring stability to our economy," she said in her speech, which focused heavily on increased defence spending. One of Reeves' self-imposed fiscal rules is to aim to balance day-to-day public spending with tax revenues by 2030. To get back on target, she shaved growth in day-to-day spending on public services to 1.2% a year in real terms from 1.3%. The centre-left Labour government also announced 4.8 billion pounds of cuts to welfare payments, angering some of its lawmakers. A government assessment of the changes, which aim to slow a surge in sickness-related benefits, estimated 3.2 million households would lose out and 250,000 additional people would enter relative poverty after housing costs by the end of the decade. British government bond prices recovered from an initial fall after the government said it planned to issue slightly less debt than expected over the next 12 months. KICKING THE CAN "The Chancellor has replenished the fiscal headroom... which may provide some relief in the short term, but this is a temporary fix, kicking the can down the road," said Shamil Gohil, fixed income portfolio manager at Fidelity International. "Longer term, budgetary challenges remain as higher interest rates and weaker growth persist." The headroom of 9.9 billion pounds - the margin against which the fiscal rules are met - remains historically low and could be wiped out by any slowing in the economy or a further rise in borrowing costs. The OBR said measures announced by Reeves would improve the balance of day-to-day spending against revenues by 14 billion pounds in 2029/30. The OBR highlighted the risk that a U.S.-led trade war could hurt Britain's economy. If the United States imposed a reciprocal 20 percentage-point increase in tariffs on all its trade partners, Britain's economy would be 1% smaller than its central forecast in the peak year of impact in 2026-27. Trump is due to announce on April 2 his decision about whether to impose reciprocal tariffs on partners. The OBR said Britain's government was set to borrow 47.6 billion pounds ($61.4 billion) more by the end of the decade than it expected five months ago. "If things go badly with the economy and the public finances, then the Chancellor will be back to square one, perhaps with a need to tighten spending again or perhaps tax increases or even a combination of both," Philip Shaw, chief economist at bank Investec, said. Reeves and Starmer promised voters last year they would not hike income tax or other big revenue-raisers. But they could extend a freeze on the thresholds at which people start to pay basic and higher rates of income tax - introduced by the previous Conservative government as a way to drag more people into the tax net. Liam O'Donnell, a fixed income manager at Artemis Fund Managers in Edinburgh, said investors remained worried about the pace of borrowing in Britain with economic growth so elusive. "I think the market is going to settle on expecting tax hikes for the autumn," he said. https://www.reuters.com/world/uk/reeves-prepares-tough-uk-budget-update-growth-slows-2025-03-25/

2025-03-25 22:27

March 26 (Reuters) - Shares of Australia's Paladin Energy (PDN.AX) , opens new tab slid on Wednesday to their lowest point in nearly two years after the uranium miner withdrew its production forecast for fiscal 2025, citing operational disruption at its flagship mine in Namibia. The temporary operational halt at Langer Heinrich Mine (LHM) was caused by a "one-in-fifty-year rainfall event," the company said. Sign up here. In early trade, the ASX-listed shares of the miner dropped 9.1% to A$5.81, marking their lowest levels since May 2023 and making them the worst-performing stock in the benchmark index. The weather conditions in Namibia led to short-term disruptions including transportation difficulties, restricted feed to the crushers and excess surface water limiting safe access to the processing plant, Paladin said. "We expect Paladin's strategy to accelerate production in the second half to hold, although its start will undoubtedly be delayed further towards the end of the period," said George Ross, senior analyst, Argonaut. The company expects to improve its production levels in the second half of the year. Due to delays in the anticipated start of mining, Paladin now expects LHM project to fall short of the target production rate of 6 million pounds by the year-end, the miner said. Paladin holds a 75% stake in LHM, which plays a key role in its uranium production. Paladin's revision of its production forecast may decrease revenue over the next few years, Ross said, adding that repair costs at the site will increase, along with a potential debt-related conditions or covenants. https://www.reuters.com/markets/commodities/australias-paladin-energy-retracts-2025-forecast-due-namibia-mine-disruption-2025-03-25/

2025-03-25 22:22

Food banks face reduced supplies due to $1 billion in funding cuts Emergency food funding paused, impacting food distribution nationwide Local farmers lose sales as USDA programs are slashed WASHINGTON, March 25 (Reuters) - Food banks across the country, already strained by rising demand, say they will have less food to distribute because of at least $1 billion in federal funding cuts and pauses by the Trump administration, according to Reuters interviews with organizations in seven states. Hunger in the U.S. has ticked up in recent years with rising inflation and the end of pandemic-era programs that expanded food aid. President Donald Trump's administration has vowed to lower inflation by cutting back on government spending, including two U.S. Department of Agriculture programs that helped schools and food banks buy food from local farms. Sign up here. Reuters spoke with food banks in seven states who said cancellation and pauses of the programs meant they expected to offer less produce, meat and other staples in the coming weeks and months, leaving scarcer food for those reliant on free supplies that helped stave off hunger. One reason is fewer expected shipments from USDA's The Emergency Food Assistance Program (TEFAP), one of the agency's core nutrition programs that buys food from farmers and sends it to food pantries, some of the organizations said. Vince Hall, chief government relations officer for Feeding America, the nation's largest food bank network, said the USDA is reviewing the program and had paused half of TEFAP funding - $500 million - sourced from the Commodity Credit Corporation, which generally gives the department a broad discretionary funding pool for various programs. A USDA spokesperson told Reuters the agency is still making purchases to support food banks but did not respond to detailed questions about TEFAP spending and why food banks are seeing reduced deliveries. In a letter to USDA Secretary Brooke Rollins dated Tuesday, a group of 26 U.S. Senators asked a series of pointed questions about canceled food purchases, and TEFAP and other USDA funding cuts. The Democrats and two Senate independents said the loss would have a "significant and damaging impact upon millions of people." Feeding America has spoken with the Trump administration about the pause and urged it to make a quick decision on whether to unfreeze the funds, Hall said. That pause compounds losses from the agency's cancellation of the Local Food Purchase Assistance (LFPA) program, which funded about $500 million annually for food banks, the organizations told Reuters. Chad Morrison, head of Mountaineer Food Bank in West Virginia, said he saw on a weekly forecast from the state of West Virginia that about 40% of the organization's expected April deliveries of products like cheese, eggs and milk from TEFAP would be canceled. That will reduce the amount of food its network of 450 food pantries and other feeding programs provide, Morrison said. Food banks are handling unprecedented demand as U.S. hunger rates climb after years of decline. In 2023, 13.5% of Americans struggled at some point to secure enough food, the highest rate in nearly a decade, according to the most recent USDA data. In rural America, the hunger rate is even higher, at 15.4%, the data shows. Anna Pesek, a farmer in Delaware County, Iowa, said about 20% of sales from her Over the Moon farm last year were from the LFPA, , opens new tab which sent her turkeys and pork to food banks across the state. Funding for that program has also been cut. She expects her pasture-raised products will no longer make their way to pantries without the agency funding. "It feels really devastating," she said. 'IT'S FRIGHTENING' Food banks and pantries in West Virginia, Illinois, Iowa, Minnesota, Wisconsin, California and Nebraska have together lost millions of dollars of federal funding and food deliveries in recent weeks, according to Reuters interviews. Julie Yurko, president and CEO of Northern Illinois Food Bank, which serves 13 counties in the state, said that over the last 18 months, her organization received $3 million from the LFPA to buy onions, potatoes, apples and other produce from local farmers. Without that program, "we are going to have less produce to give to our neighbors," she said. Illinois had $14.7 million in funding terminated and another $6.4 million in other USDA funds frozen in recent weeks, halting a food box program that paired local farmers with food pantries, said Jerry Costello, director of the state's Agriculture Department. Savannah Oates, advocacy and public relations manager at Community Action Partnership of Kern in Kern County, California, said about half the food for the organization's food bank comes from TEFAP. With deliveries paused, she said the group has about two to six months of supplies in stock and is hoping to supplement their offerings with leftover food from local restaurants. In Charleston, West Virginia, Sara Busse, volunteer coordinator for Trinity's Table, a food aid group, stood in a parking lot and surveyed a meager delivery of USDA-supplied food: two boxes each of dried potato flakes and shelf-stable milk and two cases of vegetarian baked beans. Before the Trump administration began, the deliveries filled an 18-wheeler, she said. Now, the program may need to halt its meal service to senior groups altogether, she said. "It’s dreary, it’s very frightening. We’re all losing sleep," she said. At Charleston's East End Resource Center, Martha Ross, 78, looked over Trinity's Table's sparse donations during a recent senior meal, noting it was far less than usual. "I guess we’ll get real skinny," Ross said, her voice tinged with dry humor. https://www.reuters.com/world/us/trump-cuts-hit-struggling-food-banks-risking-hunger-low-income-americans-2025-03-25/

2025-03-25 22:18

NAPERVILLE, Illinois, March 25 (Reuters) - With the 2024/25 soybean harvest still in progress, no one is going to vehemently debate Brazil’s 2025/26 production numbers right now. But the discussion could be forced in just a few weeks when the U.S. Department of Agriculture publishes its initial 2025/26 projections, including global supply and demand ledgers where Brazil’s soy crop is sure to make a statement. Sign up here. Both USDA and its Brazilian counterpart Conab tend to initially underestimate the top exporter’s soybean crop, having done so for seven of the last 10 years. USDA’s first official view of Brazil’s 2025/26 output is due on May 12 and Conab’s will come a few months later. However, USDA’s Brasilia attache last week pegged the country’s 2025/26 soybean crop at a record 173 million metric tons, up 2% on the year. Official USDA figures and those from its attache do not necessarily have to jibe. This is interesting because for the past five years, USDA’s first official estimate has come in above the attache’s, and by an average of about 6 million tons. Those differences have stemmed from both area and yield assumptions, though area has been tricky lately. USDA, its attache and Conab have all initially underestimated Brazil’s soybean plantings for at least the past five seasons. But how much further Brazilian soybean area needs to expand has come into question recently, especially amid a weak economic outlook for top bean buyer China. HOW MUCH MORE AREA? Brazilian soybean area has increased every year for the past 18 years, growing by 19% over the past four seasons alone. USDA’s attache calls for a 1.9% area gain in 2025/26, the smallest yearly rise within what would become a 19-year streak. The attache’s forecast is more aggressive than its year-ago idea for a 1% area bump in 2024/25, which has since turned into 2.6%. The bigger gains laid out early this year could potentially prevent larger surprises down the road. But the financial situation in Brazil is a bit more precarious than in recent years, when area really exploded. Three seasons ago, soy production costs for farmers in the top state of Mato Grosso jumped more than 50%, and they have come down only slightly since. With the easing in commodity prices, Brazilian producers are expected to have less available capital in 2025, possibly slowing area conversion. The attache also reports increasing odds that more farmers may declare bankruptcy this season. However, Brazil’s weakening currency has insulated its farmers against global price declines to a larger degree than the U.S. producer, for example. In the last year, Chicago soybean futures have lost 17%, but they are down only 5% when priced in reais. Brazil’s Central Bank forecasts the real to remain near all-time highs both this year and next. This should keep Brazilian growers active in the global market and entice them to enhance investments if prices rise and production margins improve. In the longer term, sowings are expected to continue an upward trend. Conab has estimated that by 2032/33, Brazil’s soybean area and production could reach 56 million hectares and 186.7 million tons, respectively. These numbers would have seemed unfathomable not too long ago, as Brazil’s soy crop first exceeded 100 million tons only eight years ago. USDA officially pegs the current 2024/25 harvest at 169 million tons, the same starting point it had nearly a year ago. Although that is record-large, global soybean stocks this year are not seen swelling to the previously burdensome predictions. Next year could be a different story depending on what unfolds in the market. But either way, Brazilian farmers will be planting their next – and likely record – harvest of soybeans just six months from now. Karen Braun is a market analyst for Reuters. Views expressed above are her own. https://www.reuters.com/markets/commodities/soy-powerhouse-brazil-seek-another-record-crop-2026-by-how-much-karen-braun-2025-03-25/

2025-03-25 22:17

March 25 (Reuters) - U.S. LNG developer Venture Global Inc (VG.N) , opens new tab has asked federal regulators for permission to begin operations of its entire Calcasieu Pass LNG export facility and TransCameron pipeline project, the final step before moving to commercial operations, according to a filing on Tuesday. The U.S. second-largest LNG exporter told the Federal Energy Regulatory Commission (FERC) that it has made significant progress in remedial work on the plant and believes it is in a position to produce at its design capacity. Sign up here. "Calcasieu Pass believes it has filed all required documentation demonstrating readiness to commence service of the remainder of the facility," it said in the FERC filing. Venture Global is requesting FERC's approval by April 1, according to the filing, and has already said it planned to start commercial operations by April 15. The U.S. is the world's largest exporter of the superchilled gas and since 2023 Venture Global has played a major role in U.S. supply growth. Calcasieu Pass LNG, at Cameron Parish, Louisiana, is the first of Venture Global LNG's facilities. It has been the center of a dispute with Venture Global's long-term customers including Shell (SHEL.L) , opens new tab, Edison (EDNn.MI) , opens new tab, Repsol (REP.MC) , opens new tab, Orlen (PKN.WA) , opens new tab and BP (BP.L) , opens new tab, which have accused the company of withholding their cargoes while selling its own LNG at premium prices on the spot market. All Venture Global's long-term Calcasieu Pass customers have filed for arbitration with the International Court of Arbitration. Venture Global has said its actions do not amount to profiteering, and that it could not move to commercial operations unless it fixed the problems with its power system. The FERC application says the power island problems have been resolved. Shell's CEO Wael Sawan said he expects to have updates from the arbitration process with Venture Global in the coming months. Sawan during Shell's capital markets day in New York City said Venture Global has already sold 400 cargoes from its Calcasieu Pass project. Founded by a former energy lawyer and investment banker, Venture Global LNG has emerged as the second largest U.S. LNG producer due to its ability to obtain financing and rapidly build export plants. It has pledged to produce close to 140 million tons of LNG per year once its projects are completed. https://www.reuters.com/business/energy/venture-global-seeks-authorization-calcasieu-pass-transcameron-projects-2025-03-25/

2025-03-25 22:13

QUITO, March 25 (Reuters) - The rupture of Ecuador's SOTE crude pipeline earlier this month spilled over 25,000 barrels of oil, the country's national disaster management agency said in a statement, affecting three rivers, wildlife and at least 5,300 people. Petroecuador confirmed the spill magnitude in a separate statement on Tuesday and said that it collected 30,257 barrels of crude oil mixed with water, prior to a separation process. Sign up here. The rupture, which was caused by a landslide and shut the pipeline for six days, forced state oil company Petroecuador to declare force majeure. The company has resumed exports of Oriente crude but has not lifted the declaration. "EP PETROECUADOR reported that containment dikes and barriers were implemented in the Viche area and said 25,116 barrels were spilled over 80 km of affected areas," the National Secretariat for Risk Management detailed in a report published on its website Monday night. The spill affected three rivers, nine beaches and at least 294 hectares of agricultural land in the coastal province of Esmeraldas, according to the report. Petroecuador said it has allocated $4 million for contingency measures while it is maintaining ground monitoring and conducting overflights in the affected areas, doing beach cleanups and delivering provisions to the affected families. https://www.reuters.com/business/energy/rupture-ecuador-sote-pipeline-spilled-25116-barrels-oil-2025-03-25/